The NZDUSD currency pair has moved above its 100-day moving average of 0.59597. If it remains above this level, the potential for upward movement increases.
Today’s trading sees the NZDUSD up by 0.54%, influenced by dollar selling, positive market sentiment, and breaking technical resistance. For the past two days, sellers have tested the key level, but now the pair is trading at 0.59712.
Maintaining An Upward Bias
Maintaining a position above the moving average supports further upward bias, with the next target being the August high of around 0.6000. However, returning below the 100-day moving average could lead to a downside shift.
The NZDUSD has pushed back above its 100-day moving average, a critical technical signal for us. We see the 0.59597 level as the immediate line in the sand for our short-term strategies. As long as the price holds above this mark, the path of least resistance appears to be higher.
Given this bullish break, we are considering buying call options with a strike price near the 0.6000 psychological level. This move is supported by broad US dollar weakness following the recent August 2025 jobs report, which showed a slowdown in hiring and wage growth. The market is now pricing in a higher probability of a Federal Reserve rate cut before the end of the year, which fuels this dollar selling.
To add to this view, recent data showed China’s Caixin Manufacturing PMI for August unexpectedly rising to 51.2, suggesting some stabilization in New Zealand’s largest trading partner. This improves the outlook for New Zealand’s commodity exports and supports the “risk-on” sentiment we are seeing. This contrasts with the economic picture we were looking at back in early 2024, where concerns over China’s economy weighed heavily on the kiwi.
Fundamental Drivers Of NZDUSD
The Reserve Bank of New Zealand is also helping the currency, having held its official cash rate steady at its last meeting due to stubborn domestic inflation. This policy divergence with a more dovish-sounding Federal Reserve is creating a favorable environment for the NZDUSD. We see this as a key fundamental driver that was not as prominent during the consolidations of last year.
However, we must manage the risk of a false breakout, which we have seen before. If the price slips back below the 100-day moving average at 0.59597, it would signal that sellers have retaken control. In that scenario, we would look to purchase put options to protect against a swift rotation back toward the lower end of the recent trading range.
This potential for a reversal means implied volatility on NZDUSD options could rise, especially if the pair struggles to hold its gains. A decisive break and hold above 0.6000 would likely calm volatility and confirm the new uptrend. For now, the 100-day moving average is the pivot point that dictates our next move.
